Warner Music Pitches Music Tax To Universities: You Pay, We Stop Suing

from the pay-us-not-to-sue dept

Back in March, we noted that Warner Music Group had hired Jim Griffin, a music industry guy who has been pushing the concept of a "blanket license" for file sharing. The idea would be to get various ISPs to simply add an additional fee to everyone's internet access, have that money go into a pool that the recording industry would be responsible for paying out -- and then let people have free reign for file sharing. This is a bad idea for a variety of reasons. It's basically a music tax -- allowing the record industry to be lazy. Someone else gets to go out and collect all this money and hand it over to the industry to distribute (or, actually, not distribute). It effectively sets the business model of the recording industry in stone, and harms better, more innovative business models by inserting the recording industry (and not the musicians) into a role where they don't belong.

We hadn't heard much about this music tax lately, but apparently Griffin has been focused on getting universities to buy into the plan first. An anonymous reader passed on some details, saying that Columbia, Stanford, University of Chicago, University of Washington, MIT, University of Colorado, University of Michigan, Cornell, Penn State, University of California at Berkeley and University of Virginia have expressed interest and talks are under way. A basic presentation that's being given to these universities is below (if you're reading via another site, click through to see it):

There's obviously something appealing about ending the lawsuits and letting people file share freely. But, it's quite problematic to add an effective "tax" when none is necessary. Plenty of other business models, such as those we've outlined here and elsewhere can suffice to fund the creation of music. On top of that, giving the proceeds of this tax to the very industry that has so badly mismanaged musicians for so many years is a travesty -- sort of like bailing out the failed auto industry or banking industry. The presentation says that a nonprofit has been set up to handle the money, claiming that it's "to be clear we intend to operate with good intentions and not profit as a motive," but given the way the industry has acted in the past, that's difficult to take at face value. Also, this isn't really a license. It's a "covenant not to sue" -- meaning that lawsuits could still result.

Of course, while the introduction frames this as a "voluntary" blanket licensing program, the presentation also mentions that they'll need some way to get all ISPs and universities to buy into the plan, or they'll have to work out a way to "avoid massive leakage." So, basically, it's not voluntary at all. It's either join, or get saddled with significant limitations. In other words: all ISPs and universities need to agree to pay a huge tax to the very industry that hasn't been able to adapt, and then trust them to distribute the funds fairly.

Update: Warner Music got in touch and sent us a statement concerning this presentation from Jim Griffin:

"This presentation belongs to someone outside our company and represents
that individual's interpretation of issues discussed at meetings held
several months ago. It was not made by me or anyone at Warner Music
Group. Of course, we are actively engaged with universities and other
parties to seek a constructive resolution to a complex issue - how to
assure artists appropriate compensation while enabling the widespread
dissemination of their work among fans. Therefore, we are undertaking
an effort to develop new voluntary business models that seek something
other than - and we believe, better than - a litigation-based approach.
This is exactly the type of solution that several universities and their
associations have been asking for. We recognize that there are many
different potential solutions to this issue, and we are determined to
continue to think creatively and cooperatively with other parties in
order to find the best ones. At this early stage, many ideas may be
discussed and discarded, but efforts to prematurely label or criticize
the process only hinder achievement of constructive solutions."

Reader Comments

Re: Re: Re: A flat fee is already in use... they're called taxes.

With the tax, all would be free.
I am sorry but that sentence is just really really funny to me. No matter how you slice it.

What??? Of ONE band!
Because I mention one band I can now only be a true fan of one band? Thats messed up. Even later in my post I mention how much I love Metsuo (and just bought all music release so far). There are quite a few bands I try to get a lot of stuff from. But if they are on a major label, it will in no way come from any method where the label gets money. I will not give my money to assholes if at all possible. And with music it is quite possible to avoid the labels being the recipients.Do you see yourself rushing out to buy goods from artists you don't like?
Of course not, but I don't see what that has to do with anything. Just because I hate Britney Spears doesn't mean everybody has to. She seems to have plenty of fans.

Selection limitations, these services have. With the tax, Napster goes away.
Would you agree then that this is an extremely anti-competitive monopolistic move? I would definitely call this that. Any sort of method where more money goes to the major people with music seems like another attempt at screwing over the creators as well as all independants. They do not want bands around that aren't paying them money. Also, as the labels wake up to this being an alternative business model, and allow such services to use their music, the selection will increase.

... but do not forget most labels pre-pay on the basis of the artist going big.
Well maybe they need a new business model ;)

Post a song on your website that's in copyright and tell the world it's available for free.
See how long "sharing" lasts for you.
There are plenty of artists that do this already. I don't need to. They are artists that want their music heard by people and not to charge people to hear them when the people don't even know who they are. Even with the case of Nine Inch Nails he released his The Slip CD 100% free online. Just sent an email out to everybody in his mailing list saying "this ones for you guys". He is huge. Tons of people paid anyways. I am one of them. He didn't have to, but he wants people to hear the music. That shows me that he cares. I can say the same for a lot of bands that post up tons of songs on Myspace. It shows that they want me to hear the music, as I can play it unlimited times from their page without ever having to pay.

Now imagine you can now post music of any artist, including those who aren't mainstream but you help to do so by "advertising" them with downloadable music.
Again there are more and more artists these days who allow this without a tax. So I see no point in paying a tax for something that is already the direction things seem to be heading with this industry.

With today's technology it is easier and easier to cut out those major labels and for the artists to create music and get it to those who like it. I think a tax would be limiting their choices and keeping an old shrinking business alive artificially.
Why should they be allowed to collect the tax when so many musicians and movie makers are not part of their group? Those creators make a lot more money without the greedy middlemen. So why pay a tax to the middlemen at all when more and more artists aren't using them?

I agree with you in that it would be sweet to share everything 100% legally in this matter. But I see that as the law needs to be changed, or the companies need to adapt to technology. Not force technology to adapt to them with taxes. Maybe if they actually did represent everybody I might agree. Except that they don't, so I don't.